[miningmx.com] — SPOT gold hovered around $1,900 an ounce on Tuesday, as renewed fears over the euro zone’s debt crisis and concerns about stalled global growth drove investors to seek safety in bullion.
Worries about the resurfacing euro zone debt crisis and slowing momentum in global economic growth helped gold pierce $1,900 in the previous session.
Investors are closely watching a series of political and legal events in Europe, including a court ruling in Germany that might reduce the freedom of the government in contributing to the bloc’s rescue fund, and the European Central Bank’s review of its bond-buying programme to protect Italy.
Spot gold was flat at $1,900.64 an ounce, after hitting an intra-day high of $1,903.09 earlier, about $8 off the record of $1,911.46 set on August 23.
Spot gold is expected to touch $1,916 before it starts a moderate retracement, said Reuters market analyst Wang Tao.
Financial markets will also closely follow the US ISM non-manufacturing index for August later in the day.
“If we get a negative reading, it will just reinforce concerns about a global recession and possibility of some form of stimulus from the Fed (U.S. Federal Reserve) down the road,” said Ong Yi Ling, an analyst at Phillip Futures.
As long as gold holds above $1,700, the bullish trend will persist and prices could hit $2,000 by the end of the year, she added.
India festival season
India, the world’s largest gold consumer, sees its festival and wedding season start later this month. Strong demand has defied record high prices, traders said.
“The wedding season is upon us and the physical market active, there is no reason why gold shouldn’t carry on to $2,000,” said a Singapore-based trader.
But he said he was wary of building long positions just ahead of the return of the US market after a long weekend, although a dip towards $1,850-$1,860 would be an opportunity to get into the market.
The platinum-gold spread dipped to a discount of more than $20, headed for a third consecutive session in negative territory.
Spot platinum traded down 0.3 percent to $1,878.74, easing from a two-week high of $1,886.50 in the previous session.
